State of Market: Close 12/31/25
Stocks fade into year-end; long yields steady, precious metals retreat, crypto mixed
Final 2025 session sees broad equity softness as curve remains steep and silver and gas lead commodity declines; investors eye Fed pause signals, insider buying at Nike, and early-2026 policy risks
TendieTensor.com State of Market Close
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U.S. markets closed the final trading session of 2025 on a defensive note, with major equity proxies, most sectors, long-duration Treasurys, and broad commodities finishing lower. A steady macro backdrop—anchored by long-end Treasury yields near recent levels and inflation expectations that are muted beyond one year—intersected with year-end positioning and pockets of notable corporate headlines. Precious metals gave back ground after a volatile stretch, crude eased, and natural gas slid sharply. Crypto ended mixed intraday, with bitcoin modestly lower and ether slightly higher.
Macro backdrop: yields, inflation, and expectations
Treasury yields remain consistent with a steep curve profile into year-end. As of the latest available readings, the 2-year yield is 3.45%, the 5-year 3.67%, the 10-year 4.12%, and the 30-year 4.80% (data as of 2025-12-29). The positive slope from 2s to 30s underscores a curve that is biased toward a growth-and-inflation premium further out the term structure, even as front-end rates sit lower than the long end.
Inflation remains elevated in index terms, with the November CPI level at 325.031 and core CPI at 331.068. While the headline levels say little about momentum without a growth rate, inflation expectations provide useful context: near-term expectations sit higher than the longer tenors, with 1-year at 3.20%, then easing to 2.42% for 5-year, 2.34% for 10-year, and 2.44% for 30-year (December model estimates). That shape suggests a market that anticipates disinflation toward the Fed’s longer-run objective over time, but some stickiness over the next year.
Policy communication remains in focus. Minutes reported this week indicated that “interest rates could be on hold ‘for some time,’” giving policymakers room to assess the effects of earlier rate cuts. On the labor front, jobless claims were reported lower for a third consecutive week, falling below the 200,000 mark and under consensus expectations, a sign of ongoing resilience in labor-market conditions. Together, a patient Fed and steady jobs data argue for a gradual approach to policy calibration early in 2026.
Equities: broad softness into the close
All four major U.S. equity ETF proxies finished lower:
- SPY closed at 681.84 versus 687.01 prior, down 0.75%.
- QQQ ended at 614.28 versus 619.43 prior, down 0.83%.
- DIA settled at 480.61 versus 483.59 prior, down 0.62%.
- IWM finished at 246.19 versus 248.03 prior, down 0.74%.
The day’s tone fits a year-end risk trimming pattern, with large-cap growth (QQQ) modestly underperforming value/cyclicals (DIA), and small caps (IWM) tracking the broader S&P 500 proxy (SPY). The downside move came despite a yield curve that is, on balance, supportive of financials over a multi-quarter horizon, though that theme did not manifest in today’s price action.
Sector performance: technology and defensives lag
Sector ETFs closed mostly lower:
- XLK (Technology) fell to 143.96 from 145.41, down 1.00%, pacing sector declines.
- XLF (Financials) slipped to 54.77 from 55.18, down 0.74%.
- XLU (Utilities) eased to 42.70 from 42.96, down 0.62%.
- XLV (Health Care) edged down to 154.81 from 155.68, down 0.56%.
The pullback in technology was notable on a day highlighted by continued AI-related corporate developments. A report pointed to a late-year acquisition by Meta as part of a broader push by megacap technology firms to secure AI capabilities heading into 2026. While a steepening curve and potential regulatory recalibrations could be constructive for regional banks next year, financials were weaker today in line with the tape.
Bonds: duration slips as long yields hold firm
Treasury ETFs finished softer, consistent with long-end yields near 4.12% on the 10-year and 4.80% on the 30-year:
- TLT (long duration) closed at 87.17 versus 87.86, down 0.79%.
- IEF (intermediate) ended at 96.16 versus 96.48, down 0.33%.
- SHY (short duration) was nearly flat at 82.83 versus 82.85, down 0.02%.
The distribution of price pressure—heavier at the long end—fits the curve’s ongoing steepness. With the Fed signaling a willingness to observe rather than act immediately, and with inflation expectations beyond one year anchored in the low-2% range, rates markets may continue to trade the balance between growth durability and disinflation traction early in the new year.
Commodities: precious metals and energy retreat
The precious metals complex continued its recent volatility. GLD (gold) fell to 396.30 from 398.89, down 0.65%. SLV (silver) declined to 64.44 from 68.98, down 6.58%, extending a sharp two-session swing that has seen aggressive profit-taking and margin-related adjustments. Recent coverage emphasized that gold, silver, and copper strongly outperformed equities over the course of 2025 and flagged a key technical area for 2026. At the same time, there is an ongoing debate about whether silver is in a bubble, with some analysts highlighting structural tailwinds and the potential impact of export policy changes.
On that front, reports note that China is poised to assert tighter control over silver on January 1, a potentially significant development given its market share in supplying silver to technology, AI, and solar value chains. While the specifics and market impact will need to be monitored as policy details emerge, the prospect of constrained supply is a volatility variable heading into 2026.
Energy and broad commodities were also lower:
- USO (crude oil) settled at 69.15 versus 69.74, down 0.85%.
- UNG (natural gas) fell to 12.245 from 13.12, down 6.67%.
- DBC (broad commodities) eased to 22.37 from 22.64, down 1.19%.
Oil has been sensitive to evolving geopolitics and trade flows, including reports of shifting Russian crude shipments to India. Natural gas’s sharp decline stands out as a notable drag across the commodity complex today.
FX and crypto: euro steady, crypto splits
FX data are limited, but EURUSD was quoted around 1.1754 near the close. Without prior-day reference in the dataset, directional inference is limited; the pair’s level suggests a euro on firmer ground versus the dollar relative to some earlier 2025 ranges, but we do not have a direct comparison for this session.
Crypto posted mixed intraday results:
- BTCUSD’s mark was 87,551, down about 0.78% from its session open of 88,241. The intraday range spanned 87,093 to 89,117.
- ETHUSD’s mark was 2,971, up roughly 0.16% from its open of 2,966, with a range of 2,956 to 3,026.
Corporate adoption narratives were in motion this week, with one health company reportedly reversing a prior decision to hold bitcoin as a treasury asset and another firm’s stock under pressure after selling shares to purchase more bitcoin. These highlight that, despite a resilient crypto infrastructure story and periodic price strength, treasury adoption can be fluid and idiosyncratic.
Notable company and thematic headlines
- Nike: Shares moved higher after CEO Elliott Hill and director Tim Cook disclosed open-market purchases, a vote of confidence following a down year. Insider buying into year-end can serve as a sentiment catalyst for early 2026.
- AI and M&A: A late-2025 acquisition by Meta underscores the continued arms race in AI capabilities among megacaps, a theme that has influenced both fundamentals and sentiment throughout the year.
- EVs: Tesla issued a pessimistic forecast for fourth-quarter sales, while separate coverage highlighted that non-Tesla EV makers such as Rivian outperformed in 2025. The EV competitive and pricing landscape remains a 2026 focal point.
- Regional banks: Analysts see potential tailwinds for regionals next year from a steepening curve, a looser regulatory environment, and possible M&A—though these are medium-term narratives rather than immediate price drivers.
- Policy and the Fed: Minutes signaled a potential pause “for some time,” complementing firm labor data. A report that the administration may announce a replacement for the Fed Chair in January adds an extra layer of policy uncertainty to watch.
- Government funding: A new deadline looms as Congress returns in early January, elevating the risk of shutdown discussions that could weigh on sentiment and data flow if not resolved promptly.
What the day’s moves say
Today’s pattern—equities and most sectors down, long-duration bonds softer, precious metals and energy weaker—suggests an orderly de-risking into the calendar turn more than a macro shock. The curve’s steepness and long-run inflation expectations near the low-2% range are hallmarks of a market that anticipates slower inflation with growth not collapsing, but with risk premia recalibrated after a strong year for many asset classes. Technology’s underperformance aligns with a tactically overbought condition and thin holiday liquidity, rather than a fundamental break in the AI investment cycle that remains a central market theme for 2026.
Outlook: what to watch next
- Early-2026 macro: Markets will parse the first labor and inflation updates of the year for confirmation that disinflation continues while growth remains steady. With the Fed signaling patience, the data will drive front-end rate expectations and duration appetite.
- Policy path: Watch for any developments regarding Fed leadership and government funding negotiations. Either could affect volatility across rates and equities if headlines surprise.
- Earnings setup: Early preannouncements and guidance updates will inform whether margin resilience and AI-driven spending translate into revenue traction across software, semis, and cloud infrastructure. Technology leadership may hinge on delivery against high expectations.
- Commodities and supply chains: Precious metals volatility and potential changes to silver export dynamics warrant close monitoring, alongside energy flows and seasonal gas demand trends.
- Flows and technicals: The first sessions of January often feature rebalancing, tax-related flows, and positioning resets. Breadth and leadership patterns could shift quickly as liquidity normalizes.
Risks
Key risks into January include policy uncertainty (both monetary and fiscal), a potential government shutdown, geopolitical disruptions to energy and commodity markets, and execution risk in AI-related capital spending. Thin liquidity around the holiday turn can amplify moves. Finally, the debate around precious metals valuations—and particularly silver—may keep volatility elevated in that complex.
Bottom line
The market closed the year with a mild risk-off tilt, consistent with a patient Fed, a steep curve, and ongoing crosscurrents from commodities and policy. Equities eased, duration slipped, and silver and natural gas led commodity declines. Crypto was mixed. With expectations anchored beyond one year and a broadly constructive growth backdrop, investors will enter 2026 focusing on whether earnings and macro data validate the soft-landing narrative while navigating early-year policy headlines and supply-side developments in metals and energy.
U.S. markets closed the final trading session of 2025 on a defensive note, with major equity proxies, most sectors, long-duration Treasurys, and broad commodities finishing lower. A steady macro backdrop—anchored by long-end Treasury yields near recent levels and inflation expectations that are muted beyond one year—intersected with year-end positioning and pockets of notable corporate headlines. Precious metals gave back ground after a volatile stretch, crude eased, and natural gas slid sharply. Crypto ended mixed intraday, with bitcoin modestly lower and ether slightly higher.
Macro backdrop: yields, inflation, and expectations
Treasury yields remain consistent with a steep curve profile into year-end. As of the latest available readings, the 2-year yield is 3.45%, the 5-year 3.67%, the 10-year 4.12%, and the 30-year 4.80% (data as of 2025-12-29). The positive slope from 2s to 30s underscores a curve that is biased toward a growth-and-inflation premium further out the term structure, even as front-end rates sit lower than the long end.
Inflation remains elevated in index terms, with the November CPI level at 325.031 and core CPI at 331.068. While the headline levels say little about momentum without a growth rate, inflation expectations provide useful context: near-term expectations sit higher than the longer tenors, with 1-year at 3.20%, then easing to 2.42% for 5-year, 2.34% for 10-year, and 2.44% for 30-year (December model estimates). That shape suggests a market that anticipates disinflation toward the Fed’s longer-run objective over time, but some stickiness over the next year.
Policy communication remains in focus. Minutes reported this week indicated that “interest rates could be on hold ‘for some time,’” giving policymakers room to assess the effects of earlier rate cuts. On the labor front, jobless claims were reported lower for a third consecutive week, falling below the 200,000 mark and under consensus expectations, a sign of ongoing resilience in labor-market conditions. Together, a patient Fed and steady jobs data argue for a gradual approach to policy calibration early in 2026.
Equities: broad softness into the close
All four major U.S. equity ETF proxies finished lower:
- SPY closed at 681.84 versus 687.01 prior, down 0.75%.
- QQQ ended at 614.28 versus 619.43 prior, down 0.83%.
- DIA settled at 480.61 versus 483.59 prior, down 0.62%.
- IWM finished at 246.19 versus 248.03 prior, down 0.74%.
The day’s tone fits a year-end risk trimming pattern, with large-cap growth (QQQ) modestly underperforming value/cyclicals (DIA), and small caps (IWM) tracking the broader S&P 500 proxy (SPY). The downside move came despite a yield curve that is, on balance, supportive of financials over a multi-quarter horizon, though that theme did not manifest in today’s price action.
Sector performance: technology and defensives lag
Sector ETFs closed mostly lower:
- XLK (Technology) fell to 143.96 from 145.41, down 1.00%, pacing sector declines.
- XLF (Financials) slipped to 54.77 from 55.18, down 0.74%.
- XLU (Utilities) eased to 42.70 from 42.96, down 0.62%.
- XLV (Health Care) edged down to 154.81 from 155.68, down 0.56%.
The pullback in technology was notable on a day highlighted by continued AI-related corporate developments. A report pointed to a late-year acquisition by Meta as part of a broader push by megacap technology firms to secure AI capabilities heading into 2026. While a steepening curve and potential regulatory recalibrations could be constructive for regional banks next year, financials were weaker today in line with the tape.
Bonds: duration slips as long yields hold firm
Treasury ETFs finished softer, consistent with long-end yields near 4.12% on the 10-year and 4.80% on the 30-year:
- TLT (long duration) closed at 87.17 versus 87.86, down 0.79%.
- IEF (intermediate) ended at 96.16 versus 96.48, down 0.33%.
- SHY (short duration) was nearly flat at 82.83 versus 82.85, down 0.02%.
The distribution of price pressure—heavier at the long end—fits the curve’s ongoing steepness. With the Fed signaling a willingness to observe rather than act immediately, and with inflation expectations beyond one year anchored in the low-2% range, rates markets may continue to trade the balance between growth durability and disinflation traction early in the new year.
Commodities: precious metals and energy retreat
The precious metals complex continued its recent volatility. GLD (gold) fell to 396.30 from 398.89, down 0.65%. SLV (silver) declined to 64.44 from 68.98, down 6.58%, extending a sharp two-session swing that has seen aggressive profit-taking and margin-related adjustments. Recent coverage emphasized that gold, silver, and copper strongly outperformed equities over the course of 2025 and flagged a key technical area for 2026. At the same time, there is an ongoing debate about whether silver is in a bubble, with some analysts highlighting structural tailwinds and the potential impact of export policy changes.
On that front, reports note that China is poised to assert tighter control over silver on January 1, a potentially significant development given its market share in supplying silver to technology, AI, and solar value chains. While the specifics and market impact will need to be monitored as policy details emerge, the prospect of constrained supply is a volatility variable heading into 2026.
Energy and broad commodities were also lower:
- USO (crude oil) settled at 69.15 versus 69.74, down 0.85%.
- UNG (natural gas) fell to 12.245 from 13.12, down 6.67%.
- DBC (broad commodities) eased to 22.37 from 22.64, down 1.19%.
Oil has been sensitive to evolving geopolitics and trade flows, including reports of shifting Russian crude shipments to India. Natural gas’s sharp decline stands out as a notable drag across the commodity complex today.
FX and crypto: euro steady, crypto splits
FX data are limited, but EURUSD was quoted around 1.1754 near the close. Without prior-day reference in the dataset, directional inference is limited; the pair’s level suggests a euro on firmer ground versus the dollar relative to some earlier 2025 ranges, but we do not have a direct comparison for this session.
Crypto posted mixed intraday results:
- BTCUSD’s mark was 87,551, down about 0.78% from its session open of 88,241. The intraday range spanned 87,093 to 89,117.
- ETHUSD’s mark was 2,971, up roughly 0.16% from its open of 2,966, with a range of 2,956 to 3,026.
Corporate adoption narratives were in motion this week, with one health company reportedly reversing a prior decision to hold bitcoin as a treasury asset and another firm’s stock under pressure after selling shares to purchase more bitcoin. These highlight that, despite a resilient crypto infrastructure story and periodic price strength, treasury adoption can be fluid and idiosyncratic.
Notable company and thematic headlines
- Nike: Shares moved higher after CEO Elliott Hill and director Tim Cook disclosed open-market purchases, a vote of confidence following a down year. Insider buying into year-end can serve as a sentiment catalyst for early 2026.
- AI and M&A: A late-2025 acquisition by Meta underscores the continued arms race in AI capabilities among megacaps, a theme that has influenced both fundamentals and sentiment throughout the year.
- EVs: Tesla issued a pessimistic forecast for fourth-quarter sales, while separate coverage highlighted that non-Tesla EV makers such as Rivian outperformed in 2025. The EV competitive and pricing landscape remains a 2026 focal point.
- Regional banks: Analysts see potential tailwinds for regionals next year from a steepening curve, a looser regulatory environment, and possible M&A—though these are medium-term narratives rather than immediate price drivers.
- Policy and the Fed: Minutes signaled a potential pause “for some time,” complementing firm labor data. A report that the administration may announce a replacement for the Fed Chair in January adds an extra layer of policy uncertainty to watch.
- Government funding: A new deadline looms as Congress returns in early January, elevating the risk of shutdown discussions that could weigh on sentiment and data flow if not resolved promptly.
What the day’s moves say
Today’s pattern—equities and most sectors down, long-duration bonds softer, precious metals and energy weaker—suggests an orderly de-risking into the calendar turn more than a macro shock. The curve’s steepness and long-run inflation expectations near the low-2% range are hallmarks of a market that anticipates slower inflation with growth not collapsing, but with risk premia recalibrated after a strong year for many asset classes. Technology’s underperformance aligns with a tactically overbought condition and thin holiday liquidity, rather than a fundamental break in the AI investment cycle that remains a central market theme for 2026.
Outlook: what to watch next
- Early-2026 macro: Markets will parse the first labor and inflation updates of the year for confirmation that disinflation continues while growth remains steady. With the Fed signaling patience, the data will drive front-end rate expectations and duration appetite.
- Policy path: Watch for any developments regarding Fed leadership and government funding negotiations. Either could affect volatility across rates and equities if headlines surprise.
- Earnings setup: Early preannouncements and guidance updates will inform whether margin resilience and AI-driven spending translate into revenue traction across software, semis, and cloud infrastructure. Technology leadership may hinge on delivery against high expectations.
- Commodities and supply chains: Precious metals volatility and potential changes to silver export dynamics warrant close monitoring, alongside energy flows and seasonal gas demand trends.
- Flows and technicals: The first sessions of January often feature rebalancing, tax-related flows, and positioning resets. Breadth and leadership patterns could shift quickly as liquidity normalizes.
Risks
Key risks into January include policy uncertainty (both monetary and fiscal), a potential government shutdown, geopolitical disruptions to energy and commodity markets, and execution risk in AI-related capital spending. Thin liquidity around the holiday turn can amplify moves. Finally, the debate around precious metals valuations—and particularly silver—may keep volatility elevated in that complex.
Bottom line
The market closed the year with a mild risk-off tilt, consistent with a patient Fed, a steep curve, and ongoing crosscurrents from commodities and policy. Equities eased, duration slipped, and silver and natural gas led commodity declines. Crypto was mixed. With expectations anchored beyond one year and a broadly constructive growth backdrop, investors will enter 2026 focusing on whether earnings and macro data validate the soft-landing narrative while navigating early-year policy headlines and supply-side developments in metals and energy.